LVMH partners with Accor to fuel Orient Express growth

Accor's Orient Express brand — which is perhaps best known for trains but has expanded its sights to hotels and superyachts in recent years — now has a new, ultraluxury partner.

The companies announced Thursday that LVMH, the French conglomerate that manages iconic brands such as Louis Vuitton and Christian Dior, is making a "strategic investment" in Accor's Orient Express brand. The revived ultraluxury brand is slated to operate three hotels by 2025, as well as two trains and a sailing ship by 2026 (the latter is currently under construction in Saint-Nazaire, France).

"Orient Express is a legend ever since its creation 140 years ago," Accor group chairman and CEO Sébastien Bazin said in a statement. "With Orient Express, Accor is reinventing the art of travel, discovery and great odysseys. With LVMH today, we are opening a new chapter in this exciting journey, with the ambition of exploring new horizons and embodying the audacity and creative passion that drive our groups. We're delighted to enlist LVMH's rare expertise to continue pushing further the frontiers of this legend and bringing its embodiment to life in an ever more singular way."

Accor acquired the Orient Express brand in 2022, and LVMH's new involvement is meant to lend its "unique expertise in high-quality products and services." However, LVMH's decision to join forces with Accor might be a head-scratcher to some: The company also owns Belmond, which operates the Venice Simplon-Orient-Express train. It would technically serve as a rival to Accor's Orient Express trains once they begin to roll down the tracks.

But the joint announcement appears to portray LVMH's Belmond experience as ultimately positive for Accor's own Orient Express plans, and it highlights the six luxury train offerings Belmond operates around the world.

"These extraordinary experiences reflect the operational expertise and creativity of LVMH Hospitality Excellence in this field," reads the Accor-LVMH release.

"Orient Express has embodied adventure and elegance since its origins," LVMH CEO and group chairman Bernard Arnault said in a statement. "Its name has become part of our cultural heritage and remains a source of inspiration for the greatest artists. Orient Express epitomizes the art of refined living and the audacity that drives each of our Houses. We are delighted to be partnering with Accor to accelerate the renewal of this travel icon. Each of our groups will bring the best of its expertise to take Orient Express to the pinnacle of the art of hospitality."

There is also a likelihood that LVMH sees the deal as an opportunity to reduce the confusion surrounding multiple operators of Orient Express-branded trains around the world. There is an incentive for LVMH to build out a vision for the Orient Express and ensure it maintains the lofty luxury standards that LVMH is known for. Furthermore, the train could serve as a way to promote other LVMH businesses, like Dom Perignon, Veuve Clicquot and its other wine and spirit brands.

"I really don't think LVMH has any ambition to be a major player in travel but sees high-end experiences as synergistic with the rest of the business, so [it] worries less about brand overlap and more about where it can sell its high-end champagne," said Richard Clarke, a managing director who covers hotels at AB Bernstein, an asset management firm.

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There has been industry chatter over the years about whether LVMH will continue to partner with hotel giants like Accor or Marriott to collaborate on more hospitality brands. LVMH has been partnered with Marriott on Bulgari Hotel & Resorts since 2001 (a very light partnership, as the brand does not participate in Marriott Bonvoy) and is now taking advantage of that French je ne sais quoi synergy with Paris-based Accor.

But don't clock the Orient Express partnership as a signal that you could see more hotel conglomerate tie-ins with LVMH just yet.

"The bullish view is that this is a sign LVMH may be interested in a wider stake in Accor's luxury business, but Orient Express is right at the top end and has the brand crossover," Clarke added. "I wouldn't read too much beyond this deal."

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